That's why understanding the category and the dynamics of how the products are shopped for and bought is so critical. Getting inside shoppers' minds -- and influencing their decisions at the moment of purchase -- is quickly gaining traction among leading retailers and consumer-package-goods companies that wish to gain distinct competitive advantages in the marketplace.
Still somewhat of an evolving term, shopper marketing can be understood as the orchestration of all activities that turn shoppers into buyers. Beyond developing novel creative communication at the point of sale, shopper marketing applies a shopper lens to the entire process of strategy, product and brand development, logistics, route to market, and selling and merchandising a product in a retail environment. From the start, it requires taking a more holistic approach when developing business-unit strategies to move beyond more than just brand-development decisions.
It's logical for business leaders to ask, "Aren't our current marketing efforts already targeting shoppers?" The short answer is yes and no. The better question to ask is: "How can we make our commercial and marketing efforts more segmented, synchronized and persuasive during the shopping process, thus becoming more effective overall?" The answer lies in paying closer attention to a number of sound guiding principles -- and avoiding serious missteps -- to better impact shopping behavior.
For companies that embrace this approach, the early signs are promising. A recent report by Deloitte Consulting, in conjunction with the Grocery Manufacturers Association, estimates that companies such as Kroger and Best Buy are seeing sales gains of 6.8% and 8.4%, respectively, by implementing effective shopper-marketing strategies.
With the potential to influence such a large area of shopper behavior, it is no wonder this discipline is receiving so much attention lately and is worth further serious examination. In fact, some companies have been recognizing the need for an objective "chief shopper advocate" in the organization who not only champions a shift in how shoppers are marketed to but also ensures that business-unit strategy, brand plans, channel plans, customer and outlet plans are "shopper perfect." This person can effectively sit in the commercial organization, providing necessary leadership to both customer teams and brand organization while ensuring the practical realities of the commercial operation.
This is a significant mind-set change that is a prerequisite for even the most basic success of shopper marketing. The successful company begins to realize that they are, in fact, a portfolio of portfolios: a portfolio of brands; a portfolio of customers; a portfolio of channels; and, yes, a portfolio of shopper occasions and missions. The portfolio choices made at the inception of a business-unit strategy will position shopper marketing either as a tactical tool to deliver a brand plan or as a significant growth platform to step-change value creation.
Below is a list of the mistakes businesses most frequently make when embarking on their shopper-marketing transformations -- and how to avoid them.
Pitfall No. 1: Letting the creative side of marketing drive the agenda
|Photo: Willie B Thomas|
For more effective creative development, pioneer an "insights-to-action" process to properly guide the creative process -- right from the beginning. The commercial side of the business needs to ensure marketing has the right insights about customers/retail/shoppers to develop the most effective creative expression to deliver the desired shopper behavior change in store. Outside agencies also must have the right insights to create effective dialogue with shoppers -- otherwise projects can fall victim to great creative grounded in no insights. Don't make the assumption that creative agencies can bridge the gap between insights and development without assistance.
Pitfall No. 2: Focusing too much on programs and not enough on process
|Photo: Kim Hall|
When I operated retail stores in New York for Mobil Oil, vendors frequently presented us with proposals for promotional activity or co-branding initiatives targeting the convenience-store shopper and gas shopper. The success of the program often rested more on the individual sales leader's tenacity and the personal relationship than on any company-wide advantage. This is a theme that is echoed in conversations today between retailers and CPG manufacturers.
Pitfall No. 3: Ignoring the little guy
|Photo: Allister Clark|
While many global manufacturers have organized themselves with major retailers such as Wal-Mart, Paris-based Carrefour and U.K.-based Tesco, there is a growing realization of the value of the high-frequency shopper. High-frequency stores, in aggregate, are Coca-Cola's largest retail customer, with Wal-Mart coming in second. This reality requires new tactics. For example, the most significant shopper-marketing driver for Coca-Cola in small stores isn't a merchandising rack or piece of prepared communication; it is the sales associates, the owners and their families who, if understood and properly motivated, can be the primary ambassadors for the brand and the linchpin in driving shopper conversion.
Pitfall No. 4: Not fully investing in capabilities
|Photo: Jacob Wackerhausen|
Procter & Gamble has taken the need for greater integration seriously by changing its people-management strategies. No longer can an assistant brand manager move forward to brand director without spending time in shopper and customer marketing. This required rotation not only builds the necessary appreciation for shopper marketing in the brand teams, it also helps erode the stigma of shopper marketing as too tactical and execution-focused.
Pitfall No. 5: Not turning shoppers' obstacles into purchasing opportunities
|Photo: Jane Norton|
While there are estimates that as many as 70% of purchasing decisions are made in store, there is no question that a significant percentage of decisions not to buy also are made at the shelf, in the cooler and in that first moment. The wrong package, the wrong message, the wrong price, the wrong merchandising and equipment, and the wrong experience for a shopper can all contribute to someone deciding not to buy.